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PPL CORPORATION

(PPL)
  Report
Delayed Nyse  -  04:00:01 2023-01-27 pm EST
29.63 USD   -0.17%
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PPL Corporation Reports Third-Quarter 2022 Earnings

11/07/2022 | 07:59am EST

ALLENTOWN, Pa. - PPL Corporation (NYSE: PPL) announced third-quarter 2022 reported earnings (GAAP) of $174 million, or $0.24 per share, compared with third-quarter 2021 reported earnings of $207 million, or $0.27 per share.

PPL reported earnings of $566 million, or $0.77 per share, for the first nine months of 2022, compared with the reported net loss of $1.61 billion, or $2.10 per share, for the first nine months of 2021.

Adjusting for special items, third-quarter 2022 earnings from ongoing operations (non-GAAP) were $305 million, or $0.41 per share, compared with $277 million, or $0.36 per share, a year ago.

Earnings from ongoing operations for the first nine months of 2022 were $832 million, or $1.13 per share, compared with $643 million, or $0.83 per share, for the first nine months of 2021.

Special items in the third quarter of 2022 primarily included integration and related expenses associated with the acquisition of Rhode Island Energy and impacts associated with the sale of Safari Holdings LLC, which was completed on Nov. 1, 2022. Special items in 2021 included a loss on the early extinguishment of debt.

'As we execute our strategy to create technology-enabled utilities of the future and deliver the clean energy transition reliably and affordably, we continue to demonstrate strong operational and financial performance,' said PPL President and Chief Executive Officer Vincent Sorgi. 'Based on our financial performance year-to-date, we have increased the midpoint of our earnings forecast from $1.37 per share to $1.40 per share.'

PPL also narrowed its 2022 ongoing earnings forecast to a range of $1.35 to $1.45 per share from the prior forecast range of $1.30 to $1.45 per share. As with the prior forecast, PPL's narrowed 2022 ongoing earnings guidance reflects a partial-year estimate of contributions from Rhode Island Energy, with the acquisition completed by PPL on May 25, 2022.

Looking forward, Sorgi said PPL also remains confident in its plan to deliver top-tier annual earnings per share and dividend growth of 6% to 8% annually. PPL's projected compound annual earnings per share and dividend growth of 6% to 8% through at least 2025 is based off its 2022 pro forma forecast range of $1.40 to $1.55 per share, with a midpoint of $1.48 per share. The pro forma forecast range reflects a full year of earnings contributions from Rhode Island Energy.

Third-Quarter 2022 Earnings Details

As discussed in this news release, reported earnings are calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP). 'Earnings from ongoing operations' is a non-GAAP financial measure that is adjusted for special items. See the tables at the end of this news release for a reconciliation of reported earnings (net income) to earnings from ongoing operations, including an itemization of special items.

In addition to the segment drivers outlined below, PPL's reported earnings in the third quarter of 2022 included net special-item after-tax charges of $131 million, or $0.17 per share, primarily attributable to integration and related expenses associated with the acquisition of Rhode Island Energy and impacts associated with the sale of Safari Holdings LLC. Reported earnings in the third quarter of 2021 included net special-item after-tax charges of $70 million, or $0.09 per share, primarily attributable to a loss on the early extinguishment of debt.

Reported earnings in the first nine months of 2022 included net special-item after-tax charges of $266 million, or $0.36 per share, primarily attributable to integration and related expenses associated with the acquisition of Rhode Island Energy and impacts associated with the sale of Safari Holdings LLC. Reported earnings in the first nine months of 2021 included net special-item after-tax charges of $2.26 billion, or $2.93 per share, primarily attributable to discontinued operations associated with the U.K. utility business, a U.K. tax rate change and a loss on the early extinguishment of debt.

Kentucky Regulated Segment

PPL's Kentucky Regulated segment primarily consists of the regulated electricity and natural gas operations of Louisville Gas and Electric Company and the regulated electricity operations of Kentucky Utilities Company.

Reported earnings and earnings from ongoing operations in the third quarter of 2022 were even compared with a year ago. Factors driving earnings results primarily included share accretion, offset by other factors that were not individually significant.

Reported earnings in the first nine months of 2022 increased by $0.08 per share compared with a year ago. Earnings from ongoing operations in the first nine months of 2022 increased by $0.10 per share compared with a year ago. Factors driving earnings results primarily included higher retail rates effective July 1, 2021, higher sales volumes and share accretion, partially offset by higher operation and maintenance expense and higher depreciation expense.

Pennsylvania Regulated Segment

PPL's Pennsylvania Regulated segment consists of the regulated electricity delivery operations of PPL Electric Utilities.

Reported earnings in the third quarter of 2022 increased by $0.03 per share compared with a year ago. Earnings from ongoing operations in the third quarter of 2022 increased by $0.02 compared with a year ago. Factors driving earnings results primarily included lower operation and maintenance expense and share accretion.

Reported earnings for the first nine months of 2022 increased by $0.12 per share compared with a year ago. Earnings from ongoing operations for the first nine months of 2022 increased by $0.08 per share compared with a year ago. Factors driving earnings results primarily included higher peak transmission demand, returns on additional capital investments in transmission, higher sales volumes and share accretion, partially offset by higher operation and maintenance expense.

Rhode Island Energy

PPL's Rhode Island Regulated segment consists of the regulated electricity and natural gas operations of Rhode Island Energy, which was acquired on May 25, 2022.

The Rhode Island Regulated Segment reported a net loss of $0.03 per share in the third quarter of 2022 and a net loss of $0.07 per share since the acquisition in May. The losses were primarily due to integration expenses and related costs associated with the acquisition, which were treated as special items. Adjusting for the special items, PPL's earnings from ongoing operations increased by $0.04 per share in the third quarter and $0.05 per share since acquisition due to the addition of Rhode Island Energy to PPL's ongoing earnings results.

Corporate and Other

PPL's Corporate and Other category primarily includes financing costs incurred at the corporate level that have not been allocated or assigned to the segments, certain non-recoverable costs resulting from commitments made to the Rhode Island Division of Public Utilities and Carriers and the Rhode Island Attorney General's Office in conjunction with the acquisition of Rhode Island Energy, and certain other unallocated costs.

Reported earnings in the third quarter of 2022 decreased by $0.03 per share compared with a year ago. Earnings from ongoing operations in the third quarter of 2022 decreased by $0.01 per share compared with a year ago due to factors that were not individually significant.

Reported earnings in the first nine months of 2022 increased by $0.80 per share from a year ago. Earnings from ongoing operations in the first nine months of 2022 increased by $0.07 per share from a year ago. Factors driving earnings results primarily included lower interest expense from less outstanding holding company debt.

2022 Earnings Forecast

PPL narrowed its 2022 earnings from ongoing operations forecast to a range of $1.35 to $1.45 per share from a prior forecast range of $1.30 to $1.45 per share, increasing the midpoint to $1.40 per share.

Earnings from ongoing operations is a non-GAAP measure that could differ from reported earnings due to special items that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations. PPL management is not able to forecast whether any of these factors will occur or whether any amounts will be reported for future periods. Therefore, PPL is not able to provide an equivalent GAAP measure for earnings guidance.

See the table at the end of this news release for a complete reconciliation of the earnings forecast.

About PPL

PPL Corporation (NYSE: PPL), based in Allentown, Pennsylvania, is a leading U.S. energy company focused on providing electricity and natural gas safely, reliably and affordably to 3.5 million customers in the U.S. PPL's high-performing, award-winning utilities are addressing energy challenges head-on by building smarter, more resilient and more dynamic power grids and advancing sustainable energy solutions. For more information, visit www.pplweb.com.

(Note: All references to earnings per share in the text and tables of this news release are stated in terms of diluted earnings per share unless otherwise noted.)

Conference Call and Webcast

PPL invites interested parties to listen to a live Internet webcast of management's teleconference with financial analysts about third-quarter 2022 financial results at 11 a.m. Eastern time on Friday, Nov. 4. The call will be webcast live, in audio format, together with slides of the presentation. For those who are unable to listen to the live webcast, a replay with slides will be accessible at www.pplweb.com/investors for 90 days after the call. Interested individuals can access the live conference call via telephone at 1-888-346-8683. International participants should call 1-412-902-4270. Participants will need to enter the following 'Elite Entry' number to join the conference: 0581347. Callers can access the webcast link at www.pplweb.com/investors under 'Events.'

Management utilizes 'Earnings from Ongoing Operations' or 'Ongoing Earnings' as a non-GAAP financial measure that should not be considered as an alternative to reported earnings, or net income, an indicator of operating performance determined in accordance with GAAP. PPL believes that Earnings from Ongoing Operations is useful and meaningful to investors because it provides management's view of PPL's earnings performance as another criterion in making investment decisions. In addition, PPL's management uses Earnings from Ongoing Operations in measuring achievement of certain corporate performance goals, including targets for certain executive incentive compensation. Other companies may use different measures to present financial performance.

Earnings from Ongoing Operations is adjusted for the impact of special items. Special items are presented in the financial tables on an after-tax basis with the related income taxes on special items separately disclosed. Income taxes on special items, when applicable, are calculated based on the statutory tax rate of the entity where the activity is recorded. Special items may include items such as:

Gains and losses on sales of assets not in the ordinary course of business.

Impairment charges.

Significant workforce reduction and other restructuring effects.

Acquisition and divestiture-related adjustments.

Significant losses on early extinguishment of debt.

Other charges or credits that are, in management's view, non-recurring or otherwise not reflective of the company's ongoing operations.

Statements contained in this news release, including statements with respect to future earnings, cash flows, dividends, financing, regulation and corporate strategy, are 'forward-looking statements' within the meaning of the federal securities laws. Although PPL Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: asset or business acquisitions and dispositions; the coronavirus pandemic or other pandemic health events or other catastrophic events and their effect on financial markets, economic conditions and our businesses; market demand for energy in our service territories; weather conditions affecting customer energy usage and operating costs; volatility in or the impact of other changes in financial markets, commodity prices and economic conditions, including inflation; the effect of any business or industry restructuring; the profitability and liquidity of PPL Corporation and its subsidiaries; new accounting requirements or new interpretations or applications of existing requirements; operating performance of our facilities; the length of scheduled and unscheduled outages at our generating plants; environmental conditions and requirements and the related costs of compliance; system conditions and operating costs; development of new projects, markets and technologies; performance of new ventures; any impact of severe weather on our business; receipt of necessary government permits, approvals, rate relief and regulatory cost recovery; capital market conditions and decisions regarding capital structure; the impact of state, federal or foreign investigations applicable to PPL Corporation and its subsidiaries; the outcome of litigation against PPL Corporation and its subsidiaries; stock price performance; the market prices of equity securities and the impact on pension income and resultant cash funding requirements for defined benefit pension plans; the securities and credit ratings of PPL Corporation and its subsidiaries; political, regulatory or economic conditions in jurisdictions where PPL Corporation or its subsidiaries conduct business, including any potential effects of threatened or actual cyberattack, terrorism, or war or other hostilities; new state, federal or foreign legislation, including new tax legislation; and the commitments and liabilities of PPL Corporation and its subsidiaries. Any such forward-looking statements should be considered in light of such important factors and in conjunction with factors and other matters discussed in PPL Corporation's Form 10-K and other reports on file with the Securities and Exchange Commission.

Contact:

Media

Ryan Hill

T: 610-774-4033

Financial Analysts

Andy Ludwig

T: 610-774-3389

(C) 2022 Electronic News Publishing, source ENP Newswire

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Financials (USD)
Sales 2022 6 999 M - -
Net income 2022 964 M - -
Net Debt 2022 13 630 M - -
P/E ratio 2022 24,7x
Yield 2022 2,99%
Capitalization 21 817 M 21 817 M -
EV / Sales 2022 5,06x
EV / Sales 2023 5,00x
Nbr of Employees 5 607
Free-Float 95,5%
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Mean consensus OUTPERFORM
Number of Analysts 14
Last Close Price 29,63 $
Average target price 32,31 $
Spread / Average Target 9,04%
EPS Revisions
Managers and Directors
Vincent Sorgi President, Chief Executive Officer & Director
Joseph P. Bergstein Chief Financial Officer & Executive Vice President
Craig A. Rogerson Independent Chairman
W. Mark Brooks Chief Information Security Officer & VP
Francis X. Sullivan Chief Operating Officer & Executive Vice President
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